Scrap prices for the US East Coast (USEC) export market increased on Tuesday. Both bulk scrap prices to the docks and prepared scrap for export prices increased amid a recent upswing in the Turkish import market. Yet, USEC contacts are concerned that fundamentals for the Turkish steel market have not improved by much and that the current bullish run will reach a market ceiling very soon.
The price of US-origin HMS I/II 80:20 started to appreciate amid a flurry of Turkish scrap imports on Jul 21 and has reached $375-376/mt CFR Turkey from $369/mt CFR. The latest deals heard on Tuesday confirm that the price is remaining stable, with firm offer levels from USEC exporters amid slightly higher ocean bulk freight rates. The USEC bulk freight rate has not risen from $50/mt CFR Turkey, though.
Even though there have not been reports of the Turkish rebar market picking up in demand and pricing, the domestic scrap market has been stable in the past couple of weeks even amid depreciation of the Turkish Lira against the US dollar. The Turkish domestic scrap market is expected to remain stable in the short-term.
The slight increases in the USEC export market and relative stability in the ocean bulk freight rates have provided some room for price increments in scrap going to the docks. The price of HMS I to the New York docks rose by $5-10/gt this week to $260-265/gt delivered export yard, P&S 5ft increased by $10-15/gt to $280-285/gt delivered, while shredder feed prices for the New York export market were helped by higher prices in Philadelphia and reached $225/gt delivered New York export yard. In Philadelphia, the price of HMS I increased by $15/gt to $260-265/gt delivered export yard, and P&S 5ft grew by $25/gt to $290-295/gt delivered. Shredder feed was sideways at $225/gt delivered Philadelphia export yard after rising in the past few weeks as some shredders restarted operations and stocked up on the grade.
Apart from doubts that the Turkish steel market could support more growth in the USEC export market, there are again reports that the US domestic market could decrease for some obsolete grades in August. Specifically, some contacts allege there are ample supplies of shredded and HMS I material available, which could prompt a $10/gt decrease this month. Prime grades are expected to remain sideways. Sellers have submitted packages to the mills and trading is expected to commence on Wednesday.
Containerized scrap prices rise too
Prepared ferrous scrap prices increased on Tuesday too, helped by an upturn along the US West Coast (USWC) as well. Containerized HMS I/II 80:20 appears to have hit market bottom last week at $305-310/mt FAS Long Beach port, and by the end of the week there were sales confirmed at $318/mt FAS port.
In that context, containerized scrap prices from USEC have enjoyed some growth as well. This week, the price of HMS I/II 80:20 increased by $5-10/mt to $325-330/mt FAS New York (NY) port, P&S 5ft rose by the same margin to $335-340/mt FAS, and containerized shredded grew similarly to $355-360/mt FAS port.
